4 Tips to Consider before Trying Real Estate Investment Rental Property as your Passive Income
Real estate rental property can be an excellent way to bring in additional money making it a passive income.
Now, investing in real estate rental property does involve more than just buying a plot of land or purchasing a property and watching the money roll in.
Many people believe that the biggest hurdle they may face is making back their money over time in real estate investment property
There are things to consider before investing in real estate rental properties.
Do your research.
Depending on the occupants you are targeting, you need to do proper research before buying or building a real estate rental property investment.
Make sure that the property is situated in a location that will attract the type of clients or occupant you hope to sell or rent to, that it will reach to the returns you are expecting and that it will appeal to the market value.
Decide If You Want to Be a Landlord
Readers of this blog know that I firmly believe that owning real estate is one of the best (if not the best) paths to sustained long-term wealth creation.
It can be a great passive income stream. However, it’s not without its headaches. When it comes down to it, being a landlord means dealing with people and all the ups and downs that go along with it.
So you need to be sure and know how to manage people when it comes to being a landlord. Not everyone can take up people’s different behaviors and characters.
Also being a landlord can be stressful with a call to you with a clogged toilet call? Best you can hire a property manager to deal with it, but even so, you still have to oversee your managers and take care of larger issues. If you don’t think you can handle it, you can look into other real estate investment properties.
Consider Extra Cash for Expenses
Apart from the fact of managing people who rented your property. You need to make sure all your expenses are well covered that you have a decent emergency fund because of a spoilt issue within your property.
What I mean here is that you must prepare a maintenance fund for both expected and unexpected expenses that come with a rental property.
This might include a new roof leakage, crack walls, electrical issues, pumping machine repairs, etc
As a smart landlord, you should set aside an amount like 5% to 10% for these capital expenses just in case there are property issues which may arise and needs urgent attention.
Is it Worth Investing in Real Estate?
Rental investment property truly can be an excellent investment and income builder provided that you are prepared and understand what you should expect from the outset.
Ultimately, real estate investment property is a risk. However, I believe that the rewards can far outweigh that risk.
So don’t be afraid to seek help where you need it, especially from associations and from professionals such as attorneys and real estate experts. This is the hallmark that can often set a successful rental property investor apart from one who fails doing it.
Looking to Invest in a rental property? Let’s talk